Is This The Most Crowded Trade In Crypto Right Now?
Despite the high gas fees and numerous other hurdles, Ethereum continues to reign as the Layer1 of most hope. Although you will often hear complaints about gas fees, the crypto community continues to hold ETH in very high regard. It is rather interesting how this never seems to change. Even when MATIC, Solana, and Avalanche shocked the market with blistering price action, the attention always returned to ETH.
It’s almost as if Ethereum allows these “ETH killers” to have a shot at the crown, just before reasserting dominance. When you compare the transaction volumes of blockchains like Solana and Ethereum, it is evident that Solana processes far more transactions than Ethereum. There may well be more transactions processed on the Solana chain, but ETH still dominates the market in trading volume.
Ethereum trades approximately 20X Solana’s daily trading volume. Ethereum is undoubtedly the leading Layer1. However, alternative Layer1 chains like Solana and Avalanche can continue to gain a larger share of the pie over time, ultimately reducing the strength of Ethereum’s dominance. This is a likely scenario; it all depends on how Ethereum handles its current limitations.
Should You Buy Layer1 Alternatives While Betting On Ethereum?
This is rather strange when you think about it, but it’s true! Many choose to use an ETH alternative for transacting while holding ETH in anticipation of what the future may bring. Logically, the chain with adoption should be the one that succeeds, right? This is exactly why I choose to hold modest amounts of alternative layer 1 blockchains such as Solana, Fantom, and even Secret.
SCRT is privacy-based, which could turn out to be a real wild card. Getting back to ETH, the charts reveal two very bullish scenarios that could play out in the near future. Let’s take a look at the charts.
The First Bullish Ethereum Scenario Investors Should Be Watching
Looking at the daily chart, there appears to be a double bottom playing out and nearing the neckline. Double bottom patterns are bullish reversal patterns typically seen in Bitcoin price action. BTC tends to respect this pattern and is often instrumental in triggering bullish pumps higher.
As shown above, the neckline is approximately at the $ 3,200 level. A confirmed breakout above the neckline will likely drive ETH back to the 4K level. This recent pump doesn’t seem to have too much volume, so we will have to watch and see how this pattern plays out. Remember, volume sustains market movements; without substantial volume, apparent strong moves are eventually erased.
Ethereum Outlook: The Second Bullish Scenario That Could Drive ETH Higher
If ETH is rejected at the neckline, there is still another opportunity at hand for ETH to move higher. A rejection at $3200 is not necessarily a bad thing, as a new pattern is waiting in the wings to replace the failed double bottom. ETH now has the opportunity to form an inverse head-and-shoulders pattern, a bullish reversal pattern.
This particular pattern has been respected quite often of late and is perhaps the one most likely to play out. Both patterns aim to propel ETH towards 4K if they succeed. At the time of writing, ETH has retreated to trade just below $3K, at approximately $2960, which, at this stage, points to the latter of the two options being the most likely to succeed.
Where Can You Trade Ethereum (ETH)? Best Platforms Explained
The most favorable exchange for trading ETH, whether spot or futures, is Bybit. Binance is also a leading crypto exchange that has excellent trading fees. By purchasing and holding Binance’s BNB token, you can reduce fees even further. Both exchanges are excellent options as they are industry leaders. The larger the exchange, the greater the liquidity, which is especially important in futures trading.
Best Places To Store Ethereum (ETH): Safest Wallets Explained
The best places to store and self-custody your ETH are with a hardware wallet. Tangem is a great solution, as it not only supports ETH but also a wide range of altcoins. In other words, it is very likely to be compatible with much of your portfolio. Use the code WK6ZP4 to qualify for a 10% discount when purchasing directly from Tangem. Other reputable options include Ledger and SafePal.
Tangem is a good choice for altcoin investors wanting to secure a diverse portfolio. Ledger is well-known and was established in 2013, giving it a track record. SafePal is a good choice because it is an inexpensive, air-gapped hardware wallet that many investors prefer for its additional layer of security.
Conclusion
Technical analysis is a game of probability, not a guarantee. We will have to keep a close eye on the price action and wait for a confirmation. There is also the chance that both patterns are rejected and ETH heads lower. It would, however, be great to see ETH at $4K again, but we will have to wait and see! See you again soon, and hopefully, ETH has broken out above $3200!
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